National Association of Realtors economists can never pass a dung heap without sticking a flower in it. NAR Senior Economist Lawrence Yun did it again yesterday. After a rare bit of no-shill honesty in which Groundhog Yun popped up, looked at the storm clouds and predicted trouble the rest of the year, he could not resist copping his ingrained Pollyanna attitude about 2008.
Yun announced that the NAR had lowered its forecast for 2007 home sales one percent from its prediction just a month ago. In other words, they found about 70,000 more homes that won't sell in 2007. But before we could shout "Hallelujah" at the its-about-time honesty of it all, Yun added that next year's total sales of homes would be up slightly above the NAR's guesstimate of last month.
We wonder what these guys are drinking, or trying to get the rest of us to drink. Everything we read says that folks at the low end and the high (jumbo mortgage) end of the lending scale will have continuing problems securing home loans. And if I can't sell my house, I am not going to buy yours. The volatility in the equity markets has everyone nervous, but those nervous investors aren't about to seek safe haven in a Miami condo or million-dollar Scottsdale hacienda. Despite a still pretty-solid U.S. economy, most predictions by economists not working for the NAR tilt toward the pessimistic for 2008. Paul Kasriel, chief economist with Chicago's Northern Trust, went so far as to say, "No one is buying into their [the NAR's] Kool Aid; that's why prices are falling." Kasriel and most economists without shame advise sitting on the sidelines (unless you absolutely, positively have to sell your house).
On the other hand, if you have lots of cash and plan to relocate in the next few years anyway, new home builders are giving away pools, televisions, closing costs and just about every other amenity you can think of to move their inventory of homes. Name your price, and you just might get it. If enough of us do that, we could help turn Lawrence Yun from shill to prophet.